Federal and state government agencies in Australia have yet to realise cloud computing’s role in the digital economy and should look to the example set by service providers such as Amazon Web Services (AWS), according to an Australian analyst.

In a blog posting, Ovum analyst Steve Hodgkinson cited the <i>2012 Cloud Readiness Index</i> report published by The Asia Cloud Computing Association which revealed a downgrading of Australia’s cloud readiness during the past 12 months due to “its weaknesses in international connectivity and broadband quality” compared to the top four cloud ready countries - Japan, Korea, Hong Kong and Singapore.

The Index tracks a range of indicators relating to cloud service enablers, such as regulations, infrastructure, and the sophistication of business and government environments.

“While the assessments behind the Index are somewhat subjective, it appears that Australian governments at federal and state levels still have much to do to fully embrace the opportunities of the cloud services model for the digital economy, compared to other leading economies in the region,” Hodgkinson said.

“Fortunately, AWS has seen sufficient evidence of these opportunities to prioritise investment in the Australian market with the announcement of a data centre in Sydney.”

According to Hodgkinson, 10,000 organisations in Australia and New Zealand are already making use of AWS cloud services.

“Enthusiasm for and trust in public cloud services is growing, even if government policy has been somewhat `asleep at the wheel’ regarding the opportunities and impacts of cloud services,” he said.

However he added that Amazon’s decision to invest locally is a useful expression of faith in the prospects of Australia’s digital economy.

“It is also noteworthy that the CIO of the Commonwealth Bank of Australia, Michael Harte, is an outspoken supporter of the benefits of public cloud services generally, and Amazon’s services specifically.”

Speaking at an AWS event in Sydney recently, Harte said that data sovereignty and security have been used as unjustified excuses to stop businesses moving to the cloud.

"The favourite [excuses] I used to hear when I talked to the big household names in infrastructure equipment was, 'It doesn't look very secure Michael. You can't do that. And there's data sovereignty; you'd want to look very, very carefully at that. And this on-demand pricing — no we just can't do that we've got rules saying specifically we can't."

Harte condemned the excuses as "absolute garbage".

Government cloud plan

While the Australian federal government has been busy developing the digital economy and the NBN rollout, Hodkingson said that it has treated cloud services with “deep suspicion”.

“For many years there has been a disconnection between the goals of the broadband project and the government’s own ICT strategy,” he said.

“AGIMO has pursued the inward-looking tactical agenda of procurement efficiency dealt it by Sir Peter Gershon’s 2008 review and when it comes to cloud services, AGIMO has come to be regarded as the man required to walk in front of the first motor car waving a red flag.”

According to Hodkingson, AGIMO’s focus has been on creating risk-oriented policy documents and procurement controls for cloud services on the assumption that the cloud is “more dangerous” than traditional approaches to sourcing ICT capabilities.

He said this approach has led to minimal adoption of cloud services by federal government agencies and a visible policy disconnection between regarding cloud services as “good for the economy” and, regarding them as “unsafe for use by government agencies”.

However, Hodkingson added that the federal government’s view of cloud was changing.
For example, the Minister for Broadband, Communications and the Digital Economy, Stephen Conroy, was developing a national cloud computing strategy(PDF).

According to Hodkingson, the cloud strategy is expected to be considered by the federal government in early 2013.

“This is expected to establish a more positive leadership position on cloud services as a catalyst for innovation both in government and in the broader economy,” he said.

Copyright 2016 IDG Communications. ABN 14 001 592 650. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of IDG Communications is prohibited.